CBN Cuts Interest Rates on Treasury Bills, Rejects N2.3trn
The Central Bank of Nigeria (CBN) has again cut interest rates on Nigerian Treasury bills with 182-day and 364-day maturities, according to auction results obtained by MarketForces Africa.
The authority floated N400 billion worth of Treasury bills on Wednesday, with a plan to raise N100 billion from the 91-day subscription, N100 billion from the 182-day subscription, and N200 billion from the one-year subscription.
Investors’ aggregate subscription came in at about N3.063 trillion, chasing the N400 billion offer size, reflecting sustained appetite for naira assets amid positive real returns on investment.
Though the authority raised more than the target, total allotment was less than 23% of the N3.063 trillion bids submitted for the auction.
Investors with interest in 91-day bills got their bucket filled as the CBN allotted N102.188 billion without changing the spot rate at 15.95%
Subscribers for 182-day Nigerian Treasury bills got less than they bargained for. The CBN allotted N47.94 billion in Treasury bills to investors, against a subscription level of N66.989 billion. Spot rate also dropped by 20 basis points to 16.42%, according to CBN auction details.
The one-year Nigerian Treasury bill was also priced lower, amid massive subscription totalling N2.893 trillion, against the N200 billion offer size. The CBN allotted N542.64 billion in long-term bills to investors at a rate of 16.43%, 20 basis points below the previous spot rate.
In the secondary market, treasury bills traded calmly, with the average yield remaining unchanged at 17.84%. Albeit, selloffs on the 04-FEB and 18-MAR papers resulted in respective yield expansions of 10bps and 19bps, respectively.
